WP8 cost per unit

[Guytronic]

Had a question for the forum.
Tried a small search to find info with minor success.

What is Microsoft's cut on each windows phone running WP as the OS?
I believe this is what's referred to as "CPI" (cost per installation) in the industry.

I remember reading last year that Apple pockets around $370.00 (unfounded) for iOS on each device.
Just wondering if MSFT makes way less money on this CPI for each Windows Phone.
Or is the cost to manufacture Nokia\Microsoft phones less?

If the CPI for MS and Apple is higher;
... Would it be true that Android essentially being low cost to free make Android the business to be into because makers can charge more for the hardware?

Just curious ... and thanx for any input.

 

[Laura Knotek]

That's a good question. I'm also curious.

 

[Guytronic]

Had a feeling there was going to be a change in deployment for Windows Phone that would help device manufacturers outside of the Microsoft group.
Never did see anything on the build information about Windows for free until I caught the podcast on TWiT last night.

WPC did hit on it here:
Microsoft drops Windows royalty fee for devices with screens under nine inches | Windows Phone Central

Thurott was all over it as probably some of the biggest news coming out of Build 2014 that MSFT was actively dodging.
Daniel Rubino, Mary Jo Foley, Paul Thurrott and Leo Laporte talk Build 2014 on the newest episode of Windows Weekly! | Windows Phone Central

To me this is a really big deal!
Much bigger than Cortana or any other upcoming update.
This definitely shows me that Microsoft is turning focus to the mobile consumer.

Hopefully the right people are in place to handle this correctly.

 

[psychotron]

I think that cost per unit info is a closely guarded secret, just like the license fees manufacturers pay to MS for Android. Just one of those things we may never know.

I absolutely agree about dropping of the fee for 9" and lower screens. That is HUGE. Overall you can just hear and feel the optimism after this years BUILD, its quite palpable compared to recent years. I thought it was very telling that even Leo feels that this year may very well be the tipping point for Windows Phone. I'm very inclined to agree that there's an excellent chance for the platform to take a big step forward if MS can capitalize on this momentum.

 

[Guytronic]

Over half the cost of the iPhone is for the OS from what I can tell.

This direction for MS will be very interesting.
A free OS hopefully secure and maintained by one of the biggest corporations on the planet.

I guess MS will be pulling money from MS mobile hardware in the near future maybe this is the trade off.
Also looks as though MS is pulling in some the top developers (Rudy Huyn comes to mind here) to keep things rolling for the appstore and the OS.

 

[psychotron]

Related to your original question - just read an article that states the OS license was $15 a copy, so there's part of it.

 

[Guytronic]

Related to your original question - just read an article that states the OS license was $15 a copy, so there's part of it.

Thanks!


The question was asked on Quora and someone high in the echelon stated $15 initially then said the cost dropped to $7 per.

 

[anony_mouse]

How do Microsoft plan to make money from WP, if not from licence fees? They are not a charity...

 

[N_LaRUE]

How do Microsoft plan to make money from WP, if not from licence fees? They are not a charity...

Apps. Just like Apple.

 

[psychotron]

How do Microsoft plan to make money from WP, if not from licence fees? They are not a charity...

Partly the same way Google does, I imagine. Give away the OS on mobile devices and make your money through ad revenue and then the rest through other services like Office 365 subscriptions, Xbox Music, etc. especially if they're starting to focus more keenly on enterprise now.

Besides, they aren't going to be making a ton of money off of mobile through licensing going forward. Think about it - they get 80% of their licensing revenue through Nokia right now. Once they bring them in house later this month that money will just be exchanged internally, so they can't really make a profit from themselves. Eliminating this fee really benefits them more than it hurts them.

 

[Kashan Osama]

How Apple makes money??? Hardware and specially tying the endusers into their hardware,those who buys an iPhone will eventually buy a Mac/ipad etc (this is a unique and Simply a mindblowingly approach),Apps and stuff...

How Google makes money? Ads,services and actually Enclosing the consumer into their services like Gmail,Youtube,Search (revenue by ads) to mention a few...

How Microsoft makes Money? Enterprise,And tying end-users into their services MORE than anyone else IMHO....

 

[Guytronic]

Just like psychotron stated...
Microsoft is the owner of both sides now.

 

[anony_mouse]

Indeed. If WP is to remain free in the longer term, the obvious ways to make money are:
- Selling apps and content. Apps can only be installed from the official app store, so MS have a monopoly over paid for WP app distribution. Anyone know how much they make from this?
- Selling devices. As Nokia make the large majority of WP devices sold, MS can take the margin on the hardware rather than the software once the takeover has been completed. For the user, the price remains the same. So for Nokia devices, this move won't make any difference. It might make a difference for other manufacturers. Did Microsoft make any announcement about IPR licensing for other manufacturers making WP devices?
- Services. But this isn't a complete answer, because it raises the question of how Microsoft make money from services. They can charge for them, but I doubt very many people pay for e.g. extra Skydrive storage. Otherwise, we are in to advertising and something more like Google's business model. Are there MS services that people would be prepared to pay for?
Note that MS do not need WP to make money from services, but WP has the advantage that they can give a preferential position to their own services.